Caddo Parish could allocate $7.5 million for GM plant purchase

Aug. 2, 2013

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Oil and gas fund

Current balance: $17 million Amount needed under proposal: $3.75 million Current balance: $40 million Amount needed under proposal: $3.75 million Source: Caddo Parish finance department

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Caddo Parish may have found a way to financially assist Elio Motors get its operations going at the former General Motors plant.

Members of the parish’s economic development committee agreed Friday to recommend appropriating $7.5 million from the parish’s oil and gas and reserve trust funds (50/50) to Caddo Parish’s Industrial Development Board (IDB) for the purchase of the former GM plant. The facility would be leased to Stuart Lichter’s Industrial Realty Group, which would assist Elio Motors in developing operations at the plant.

“In my mind, this is a better deal” than the original plan, Commissioner John Escude said.

Commissioners, in recent months, discussed the possibility of loaning Elio Motors as much as $10 million. However, investing public funds in a start up business was not something the parish could do, attorney Charles Grubb said. And so together with O. Ray Cornelius, a representative of IDB, he worked to come up another option; one that would help Elio Motors but could stand on its own as well.

The Caddo Commission will discuss a measure Monday to allocate the funds and a resolution to enter into a cooperative endeavor agreement with IDB. Any allocation of money would not be approved until the following commission meeting.

Elio Motors is up against a Sept. 4 deadline to come up with the money for the plant. It has an agreement with the facility’s most recent owner, Revitalizing Auto Communities Environmental Response Trust (RACER Trust) to pay for the facility and its equipment in segments over the next 30 months.

The Industrial Realty Group would lease the building for 25 years, under the proposal. The company would pay $300,000 annually for the first three years in which Elio Motors would get up and running. Its rent would then increase to $725,000 annually for the duration of the lease. IRG would pay for all costs associated with maintenance, insurance and operation of the facility. Caddo Parish/ IDB would retain ownership of the mineral rights, under the proposal.

Elio Motors would take up roughly 1 million square feet of the facility with the rest available for other firms.

Commissioner Michael Thibodeaux invited commercial developer Linc Coleman to hear the discussion and recommended the commission utilize Coleman’s expertise in this field in an advisory capacity as it moves forward.

The Commission meets at 3:30 p.m. Monday at Government Plaza, 505 Travis St.